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please complete 5. Interest Rate Floor: A money manager has purchased a floating rate bond offering LIBOR+3%. The money manager fears a fall in interest
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5. Interest Rate Floor: A money manager has purchased a floating rate bond offering LIBOR+3%. The money manager fears a fall in interest rates and thereby buys a floor of 5% at a premium of 3% over a 3-year time horizon. Complete the table below End of year Floor Premium LIBOR at The floating Net received year-end rate bond pays By money manager 4% 1 2 2% 3 1% Year Show the details of components of net received by money manager end 1 2. 3 Step by Step Solution
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